Oracle just reported quarterly earnings.
It reported revenues of $US9.32 billion (a slight miss) and adjusted earnings per share of 68 cents (another miss).
Analysts on average expected Oracle’s revenue to rise 4%, to about $US9.36 billion. They were also expecting adjusted earnings of 70 cents a share, up from 65 cents in the year-earlier quarter.
Oracle posted a nice and much needed beat last quarter, after having a rough go of it for the previous three quarters, missing on revenue.
Despite falling short of what Wall Street wanted, there was some good news in here.
New software licenses and cloud software subscriptions revenues were up 4% to $US2.4 billion. Oracle has been investing heavily in its cloud business, so analysts are looking for growth there.
Software licence updates and product support revenues were up 5% to $US4.6 billion. This is really Oracle’s bread and butter business.
And finally, hardware systems products revenues were up. They rose 8% to $US725 million. Maybe the promised turnaround for the hardware business has begun.
Oracle’s Engineered Server Systems, including the high-end products called Exadata and SPARC SuperClusters, grew 30%, Oracle CEO Larry Ellison says in the press release.
This is important. Ellison has previously said that the reason Oracle bought Sun Microsystems was to create these “engineered systems,” servers specifically designed to run Oracle software.
Since the purchase of Sun, Oracle has been letting sales decline on many of the lower-margin hardware products focusing instead on the more profitable engineered systems. Analysts have been waiting for evidence that this strategy will pay off for Oracle.